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In a recent decision, Merritt v. Tigercat Industries, 2016 ONSC 1214, an Ontario court held that the employer did not have sufficient cause for dismissing an employee on the basis of his pending criminal charges and allegations by another employee of potentially related conduct, where the employer had failed to carry out a proper investigation into the matter. This case underscores the need to carry out an appropriate investigation before determining that termination, or any form of disciplinary action, is merited.

The case also brings clarity to the issue of whether an employee can refuse to answer questions in a workplace investigation that pertain to criminal charges brought against him.

Most of us are familiar with the right to remain silent during a criminal investigation. It is the basic protection afforded to a person charged with a crime from being forced to incriminate themselves. It is sometimes referred to as the right against self-incrimination. The court in Merritt v. Tigercat found that the employee had a right to silence and a presumption of innocence in a workplace investigation where the investigation occurred at the same time that the employee was facing criminal charges – the employee was not required to answer questions about his arrest or the charges against him.

The Facts

Keith Merritt (“Merritt”) was a 67 year old labourer that had been employed by Tigercat Industries (“Tigercat”) for 12 years. Shortly before his termination from employment, Merritt was arrested in the workplace by two police officers for alleged sexual assault against minors. The day following his arrest, Merritt met with Tigercat officials and declined to discuss the details of his arrest or the pending charges, stating only that the charges did not involve any other Tigercat employees. Merritt was placed on a two week leave of absence.

Shortly after Merritt’s return to work, a fellow employee allegedly reported to Tigercat officials that she was involved in the criminal case against Merritt. The female employee advised that she had previously worked at Merritt’s farm when she was a minor. The female employee advised that during this time, Merritt made sexual advances towards her and she was not prepared to interact with him in the workplace (significantly, the identity of the employee was never shared with Merritt and her direct evidence concerning the alleged interactions with Merritt was not brought forward in the court proceedings that ensued).

That same day, Merritt was once again called to meet with Tigercat officials and was questioned about his arrest and pending criminal charges. One official raised a concern regarding the female employee who was alleged to have been involved Merritt’s personal legal situation. Merritt again declined to discuss his arrest and pending criminal charges, stating that no other Tigercat employees were involved in the criminal charges.

Tigercat terminated Merritt’s employment for cause, largely because it believed Merritt had been dishonest on the two occasions when he advised that no other Tigercat employee had been involved in the arrest and subsequent criminal charges for sexual assault against minors. Underlying the alleged dishonesty was a clear belief on Tigercat’s part that Merritt was obligated to discuss his arrest and pending criminal charges when questioned by Tigercat officials. Tigercat also alleged that the arrest and criminal charges were inherently prejudicial to its good name and reputation in the community.

Merritt sued Tigercat for wrongful termination alleging, among other things, that no real investigation was conducted and that, even if the two brief meetings with Tigercat officials could constitute an investigation, he had a right to remain silent and right not to incriminate himself by discussing his arrest or pending criminal charges. Merritt claimed there was neither evidence of any connection between the workplace and the criminal charges, nor any evidence of any reputational damage to Tigercat.

The Court’s Decision

The court found that no real investigation had been conducted by Tigercat.

In terms of the meetings with Tigercat officials, the court found that Merritt was under no obligation to discuss or disclose the criminal charges. Tigercat could not compel him do so. At the time, the investigation was ongoing and he had been criminally charged. Merritt was entitled to the presumption of innocence and the right to silence. Any disclosure to Tigercat officials could easily be forwarded to the police and had the potential to prejudice his criminal case. Given the right to silence and right against self-incrimination, Merritt’s actions could not be characterized as dishonest.

While those findings alone would likely have been sufficient for the court to determine that Tigercat did not properly terminate Merritt’s employment for cause, the court found it significant that Tigercat failed to produce any direct evidence of the female employee who had alleged that she was involved in the criminal case against Merritt (and the hearsay evidence that was produced suggested that she may not have been materially involved). Without that evidence, there was no link between the workplace and the Merritt’s criminal charges.

Tigercat’s assertion that its reputation had been harmed was described by the court as a “bald allegation” that was unsupported by any evidence. Further, since Tigercat allowed Merritt to return work following his arrest and the criminal charges, Tigercat’s allegation of reputational harm was disingenuous, at best.

Ultimately, Tigercat could not sustain the position that Merritt’s employment was terminated for cause.

Merritt was awarded damages equivalent to 10 months of his salary.

Lessons Learned

How the findings and conclusions in this case will be applied in others remains to be seen.

That said, it is apparent that the courts are now, more than ever, prepared to find that due process is an important aspect of any fair workplace investigation.

That does not mean that employers will be held to the standard of perfection. It does, however, mean that where a workplace investigation occurs at the same time a criminal investigation is underway, an employer must carefully consider how it will respond where an employee invokes the “right” to remain silent. It may well be that the workplace investigation proceeds and conclusions are drawn on the information reasonably available to the employer. Automatic termination, particularly where it is premised on a failure on the employee’s part to answer questions about criminal conduct, would be a mistake – a mistake that can be expensive for an employer.

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